Germany: Exports unexpectedly rise in September and provide a glimmer of hope
November 8, 2019
At the close of the third quarter, exports unexpectedly increased 1.5% month-on-month on a calendar- and seasonally-adjusted basis, which is up from the revised 0.9% drop in August (previously reported: -1.8% month-on-month). Meanwhile, imports expanded 1.3% month-on-month in September, up from the revised 0.1% increase recorded in the prior month (previously reported: +0.5% month-on-month). The trade surplus consequently widened from EUR 18.7 billion in August to EUR 19.2 billion.
Compared to the same month a year earlier, exports rose 4.6% in September and contrasted the 3.6% contraction logged in August; the 12-month moving sum of exports, meanwhile, rose to 1.0% in September from 0.6% in the prior month. Imports expanded 2.3% year-on-year in September, swinging from the 3.0% decrease in the prior month; the 12-month moving sum of imports, however, slowed to 2.7% from 3.0%. Hence the 12-month moving sum of the trade balance widened to a EUR 224.2 billion surplus from EUR 222.7 billion in August.
The President of the Federal Association of Wholesale, Foreign Trade and Services, Holger Bingmann, commented that “foreign trade always seems to be good for surprises (…). However, this is no reason for the all-clear and trend reversal. The series of monthly violent up and down rashes is just continuing”. While Bingmann pointed out external headwinds and potential goods news regarding the Sino-American trade war, he also noted the need for “structural modernization in the tax system and for reducing bureaucracy” in Germany.
Carsten Brzeski, chief economist at ING Germany, stated that “the unexpected rebound in exports means that Germany might have avoided a technical recession at the very last minute. (…). In fact, today’s trade data suggests there has been hardly any negative drag from net trade on 3Q GDP. (…) Still, contraction or not, the fact remains that the German economy has been in de facto stagnation for more than a year. This is nothing to be too cheerful about.”
Author: Jan Lammersen, Economist